AAI: Beyond Productivity - How Employers Gain More from Apprenticeship

The AAI was launched in 2015 to expand registered apprenticeships in the United States. As part of the evaluation of AAI, 68 non-random employers—representing a cross-section of industries, geographic areas, and apprenticeship program durations and occupations—responded to a survey on the costs and benefits of their AAI-affiliated registered apprenticeship programs.

The survey inquired about two types of benefits: direct benefits (the value of apprentices’ productivity) and indirect benefits (the value the employer experiences beyond that increased productivity, such as reduced turnover and improvements in company culture). Typically, calculations of apprenticeship benefits focus solely on direct benefits.

This Level 2 brief discusses the number and value of indirect benefits to employers. Supporters of apprenticeships, including state and local workforce agencies, can use these findings from the AAI evaluation to promote the adoption of apprenticeships by employers. Direct benefits estimates were based on employers’ reports of a reference apprentice’s increased productivity. Indirect benefits were employers’ reported values relative to the value of the reference apprentice’s increased productivity.

The researchers examined the following questions:

1) Which indirect benefits are most frequently experienced by employers?
2) How large are the monetary values of indirect benefits for employers?
3) How does the experience of indirect benefits and their monetary value vary across employers and occupations?
4) How are indirect benefits associated with net benefits?

(This report is 22 pages long.)

(This study took place in 2020.)

The findings described in this brief could help expand awareness of the specific types of indirect benefits employers can expect by investing in registered apprenticeships. Although these findings are not generalizable to all registered apprenticeships, they do provide helpful insights and considerations that can inform other expansion efforts.

The researchers identified the following findings:

Which indirect benefits are most frequently experienced by employers?

• All employers reported experiencing at least one indirect benefit, most commonly improving company culture.
• Some indirect benefits tended to be reported together, most commonly loyalty and reduced turnover.
• Typically, employers reported experiencing multiple indirect benefits from their apprenticeship programs.

How large are the monetary values of the indirect benefits for employers?

• Employers rated as especially valuable an improved pipeline of skilled workers, employee loyalty, co-worker productivity, company culture, and reduced turnover.
• Surveyed employers enjoyed a median total of $25,045 in estimated indirect benefits per apprentice.

How does the experience of indirect benefits and their monetary value vary across employers and occupations?

• Much like the estimated value of individual indirect benefits, the estimated total value of the indirect benefits of apprenticeship varied substantially across employers.
• The value of indirect benefits for surveyed employers ranges widely, from $5,000 to over $150,000 per apprentice.
• Surveyed employers’ estimates of the value of the indirect benefits varied with the characteristics of the employers and their apprenticeship programs.

How are indirect benefits associated with net benefits?

• The indirect benefits associated with employers’ apprenticeship programs were closely related to the employer’s total net benefits.
• Most surveyed employers associated with the AAI grantees experience multiple indirect benefits, the most common and valuable being improvements in company culture, employee loyalty, and talent pipeline.
• AAI grantees reported that they used the topic of indirect benefits to engage employers in discussions about apprenticeship.
• Findings on indirect benefits have implications for crafting outreach messaging.

The authors did not propose recommendations.

• Last Updated:
• Created:
• Resource Publication Date: 2022
• Author(s): Kuehn, D.; Marotta, J.; Miguel, M.S.; Lerman, R.
• Funding Source: U.S. Department of Labor, Employment and Training Administration
• Resource Availability: Publicly available
• Posted by: India Johnson
• Posted in: Workforce System Strategies